740.00112 European War 1939/5713⅔

Memorandum of Conversation, by Mr. John D. Jernegan of the Division of Near Eastern A fairs

Participants: Mr. Fagan (BEW)29
Mr. George (Eu)30
Mr. Riddleberger (Eu)31
Mr. Auchincloss (DM)32
Mr. Villard
Mr. Jernegan

It was unanimously agreed that there appeared to be a good possibility of arriving at an economic agreement for Spanish North Africa which would be advantageous to the United States from both the political and economic warfare point of view.

Mr. Fagan presented a memorandum33 containing a list of Spanish North African normal imports in foodstuffs and the like and a list33 of the products of Spanish North Africa which the Board of Economic Warfare would be interested in buying, either to fill our own supply needs or to prevent them from going to the Axis. He said that, with the possible exception of sugar, there would be no difficulty in supplying from this country all of the normal food imports of the area.

The question of observers to supervise the distribution of commodities sent to Spanish North Africa was raised, and all present agreed that it would not be necessary to insist upon the admission of such observers. It was felt that the quantities would be so small, and the need so great within the area, that the risk of re-export would be negligible. Mr. Fagan indicated, however, that BEW would be very much interested in sending over a buying commission which, in addition to handling our purchases, would have some opportunity to observe handling of our shipments and make reports on general conditions.

It was brought out that the British have suggested making the proposed agreement a joint Anglo-American affair. The general feeling was that it would be better not to have formal British association, although we should, of course, arrange for informal British cooperation. Mr. Auchincloss said that he would like to consult Mr. Finletter34 on this point before expressing a definite opinion.

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It was further agreed that any arrangement made with General Orgaz respecting Spanish North Africa should be kept entirely separate from any similar negotiations in Madrid in connection with Peninsular Spain. It was felt that if an agreement is reached, it should be kept in operation without regard to developments in Spain itself, unless there should be some breach of its terms by the Spaniards in Spanish North Africa.

Mr. Fagan and Mr. Riddleberger said that they would inform the United States Commercial Corporation of our plans in order that the USCC should not include Spanish North Africa in its negotiations with the Spanish Government in Madrid.

Mr. Fagan said that it would probably be necessary to strike a balance between the values of goods purchased by the Spaniards in this country and those which we might buy in Spanish North Africa. However, after some discussion, it was decided that in the initial stages of negotiations we need not attempt to make a direct tie-up between the commodities we might offer and the exact quantities of goods we would like to obtain. It was agreed that Mr. Fagan should prepare another list which would include not only quantities but the approximate values of the goods to be included in the agreement. The Department could then send this list to Mr. Childs at Tangier, who would be instructed to inform General Orgaz of the articles and quantities which we would be prepared to supply and to present a general list, without specifying quantities or values, of the commodities we would like to purchase in Spanish North Africa. In the course of his negotiations, Mr. Childs could determine how far it might be practicable to go in insisting upon facilities for the purchase of the various individual items included in the list.

  1. Melvin M. Fagan, Assistant Chief of the Blockade Division, Board of Economic Warfare.
  2. W. Perry George, Division of European Affairs.
  3. James Williams Riddleberger, Division of European Affairs.
  4. John W. Auchincloss, Division of Defense Materials.
  5. Not printed.
  6. Not printed.
  7. Thomas K. Finletter, special assistant to the Secretary of State and Acting Chief of the Division of Defense Materials.